The MSCI KLD 400 Social Index was launched in 1990 and is designed to help socially conscious investors weigh social and environmental factors in their

investment Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...

choices. It was founded by KLD's

Amy Domini Amy Lee Domini (born January 25, 1950) is an American investment adviser and author known for her work in social investing. Early life and education Amy Lee Domini was born on January 25, 1950, in New York City, to Margot Cabot (Colt), a te ...

as the Domini 400 Social Index. The

MSCI MSCI Inc. (formerly Morgan Stanley Capital International) is an American finance company headquartered in New York City. MSCI is a global provider of equity, fixed income, real estate indices, multi-asset portfolio analysis tools, ESG and ...

KLD 400 Social Index is designed to provide exposure to the

common stock Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other C ...

s of companies that KLD determines have positive

environmental, social and corporate governance Environmental, social, and governance (ESG) is shorthand for an investment, investing principle that prioritizes environmental issues, social issues, and corporate governance. Investing with ESG considerations is sometimes referred to as social ...

(ESG) characteristics. The KLD400 consists of 400 companies drawn from the universe of the 3,000 largest U.S. public

equities Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporation in proportion t ...

as measured by float-adjusted

market capitalization Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

. The

index Index (: indexes or indices) may refer to: Arts, entertainment, and media Fictional entities * Index (''A Certain Magical Index''), a character in the light novel series ''A Certain Magical Index'' * The Index, an item on the Halo Array in the ...

is composed approximately 90% of

large-cap Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

companies, 9% mid-cap companies chosen for sector diversification, and 1%

small-cap A small cap company is a company whose market capitalization ( shares x value of each share) is considered small. In the United States, this includes market caps from $250 million to $2 billion (as of 2022). Overview A small cap company typicall ...

companies with exemplary social and environmental records. The eligible universe for the KLD400 is the 3,000 largest U.S. companies (by float-adjusted market capitalization) in the U.S.

equity market A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange a ...

. KLD selects the eligible universe index on April 15 (or closest business day) of each year. KLD defines U.S. equity as follows: * U.S. headquarters * Primary market listing is the

NYSE The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...

NASDAQ The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...

* Companies with non-U.S. incorporation for tax or regulatory purposes are evaluated on a case-by-case basis KLD follows the rules of the FTSE AWD USA Index. The following types of equities are not eligible for the KLD400: *

Preferred stock Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt ins ...

s * Limited or other types of partnerships *

Royalty trust A royalty trust is a type of corporation, mostly in the United States or Canada, usually involved in oil and gas production or mining. However, unlike most corporations, its profits are not taxed at the corporate level provided a certain high perc ...

s *

Closed-end fund A closed-end fund (CEF), also known as a closed-end mutual fund, is an investment vehicle fund that raises capital by issuing a fixed number of shares at its inception, and then invests that capital in financial assets such as stocks and bonds. ...

s In 2010, it was renamed from FTSE KLD 400 Social Index to MSCI KLD 400 Social Index.

Sector representation

The GICS breakdown is shown here. The index is highly concentrated—i.e., information technology makes up over 39% of the total market capitalization.

Selected constituents

Constituents which make up 70% of the total index weight. As can be seen, 33% of the index is made up from three companies (Nvidia, Microsoft and Alphabet).

References

External links

MSCI KLD 400 Social Index Factsheet
American stock market indices Ethical investment stock market indices {{invest-stub

Sector representation

Selected constituents

See also

References

External links